- Samarco says tests on tailings show no danger to human health
- Steps by BHP, Vale to prevent harm insufficient: UN experts
A United Nations probe into a deadly mine spill in Brazil said waste from a burst dam was toxic and steps taken by BHP Billiton Ltd. and Vale SA to prevent harm weren’t sufficient. The companies’ joint venture Samarco Mineracao SA said there’s no danger to human health. BHP shares fell.
Evidence showed the 50 million metric tons of iron ore waste released from the Nov. 5 dam rupture contained high levels of toxic heavy metals and other toxic chemicals, the UN Office of the High Commissioner for Human Rights said in a statement on Wednesday. Samarco said in a statement that while the company respects UN opinion, it affirms that all measures are being taken.
The spill has been called the biggest mining disaster in Brazil’s history, with about 20 people either confirmed dead or still missing after the dam burst sent a wave a mud cascading into a village. The incident is adding to pressures on BHP and Vale, which are contending with a rout in commodities and sagging share prices. The response to the spill will test Andrew Mackenzie and Murilo Ferreira, the CEOs of BHP and Vale, who toured the site and said they were overcome by the devastation.
BHP said on Thursday that tailings from the Samarco Fundão dam contained clay and silt, were chemically stable and would behave in the environment like normal soils, while also reproducing the statement from Samarco. BHP said it noted public commentary on the composition of the tailings, without mentioning the UN, according to the e-mailed remarks. Vale’s office in Singapore referred queries to representatives in Brazil.
BHP stock sank 3.7 percent to close at A$18.94 in Sydney on Thursday, the lowest since 2005. The shares dropped 1.2 percent to 843.5 pence by 8:19 a.m. in London and touched the lowest since 2008. On Wednesday, Vale lost 2.7 percent to close at the lowest level since 2004.
“Steps taken by BHP, Vale and the Brazilian government to prevent harm were clearly insufficient,” said UN Special Rapporteur on human rights and the environment John Knox and UN Special Rapporteur on human rights and hazardous substances and wastes Baskut Tuncak. “This is not the time for defensive posturing.”
Samarco, BHP and Vale have said they are focusing efforts to help victims and minimize damage. Samarco will set aside $260 million to fund emergency measures including prevention, remediation and compensation for the effects of the incident, BHP said in a Nov. 17 statement.
If the mud is found to be toxic, those responsible would be punished, Governor Fernando Pimentel told reporters a day after the collapse. The statement from Samarco on Wednesday followed remarks on Nov. 6 from the unit that the waste is mostly silica and doesn’t contain chemicals that are harmful to health.
JPMorgan Chase & Co. has downgraded BHP to underweight, citing potential expenses related to the Samarco incident as well as the commodity-price drop. The Australian target was cut to A$18 from A$27, according to analyst Lyndon Fagan. That compares with an average of A$25.40, according to estimates compiled by Bloomberg.